Editing Wilson–Gorman Tariff Act

{{more citations needed|date=July 2024}}

{{Short description|United States tariff reduction in 1894}}
{{Use American English|date=January 2019}}
{{Use mdy dates|date=January 2019}}
[[File:Grover Cleveland and Wilson-Gorman Tariff Cartoon.jpg|thumb|250px|''[[Arthur P. Gorman|Gorman]]'s Triumph – A Humiliating Spectacle'', cartoon by [[William Allen Rogers|W. A. Rogers]] depicting [[Grover Cleveland|President Cleveland]]'s humiliation by the Sugar Trust.]]
{{Grover Cleveland series}}
The '''Revenue Act''' or '''Wilson-Gorman Tariff''' of 1894 (ch. 349, §73, {{USStat|28|570}}, August 27, 1894) slightly reduced the  [[Tariff in American history|United States tariff]] rates from the numbers set in the 1890 [[McKinley tariff]] and imposed a 2% tax on income over $4,000.<ref>Curtis, S., ed., ''The Power of Cities in International Relations'' ([[New York City|New York]], [[Routledge]], 2014), [https://books.google.com/books?id=1BdgAwAAQBAJ&pg=PA141 p. 141].</ref> It is named for [[William Lyne Wilson|William L. Wilson]], [[U.S. Representative|Representative]] from West Virginia, chair of the [[U.S. House Ways and Means Committee]], and [[U.S. Senator|Senator]] [[Arthur P. Gorman]] of [[Maryland]], both [[History of the United States Democratic Party|Democrats]].

Supported by pro-free trade members of the [[History of the United States Democratic Party|Democratic Party]], this attempt at tariff reform imposed the first peacetime [[income tax]] (2% on income over $4,000 ({{Inflation|US|4000|1894|fmt=eq}}), which meant fewer than 1% of households would pay any). The purpose of the income tax was to make up for revenue that would be lost by tariff reductions. The Democrats under the [[Second presidency of Grover Cleveland]] wanted to move away from the protectionism proposed by the McKinley tariff while Cleveland was still in office. By coincidence, $4,000 ({{Inflation|US|4000|1894|fmt=eq}}) would be the exemption for married couples when the Revenue Act of (October) 1913 was signed into law by [[Woodrow Wilson|President Woodrow Wilson]], as a result of the ratification of the [[Sixteenth Amendment to the United States Constitution|16th Amendment]] to the U.S. Constitution in February 1913.

The bill introduced by Wilson and passed by the House significantly lowered tariff rates, in accordance with Democratic platform promises, and dropped the tariff to zero on iron ore, coal, lumber and wool, which angered American producers.  With Senator Gorman operating behind the scenes, protectionists in the Senate added more than 600 amendments that nullified most of the reforms and raised rates again.  The "Sugar Trust" in particular made changes that favored itself at the expense of the foreign competitors.

President [[Grover Cleveland]], who had campaigned on lowering the tariff and supported Wilson's version of the bill, was devastated that his program had been ruined.  He denounced the revised measure as a disgraceful product of "party perfidy and party dishonor," but still allowed it to become law without his signature, believing that it was better than nothing and was at the least an improvement over the McKinley tariff.

==Income Tax Amendment==
The ''New York Times'' reported that many Democrats in the East "prefer to take the income tax, odious as it is, and unpopular as it is bound to be with their constituents" to defeating the Wilson tariff bill.<ref>{{cite news |title=Democrats More Hopeful |url=https://timesmachine.nytimes.com/timesmachine/1894/01/30/104106757.pdf |work=New York Times |date=1894-01-30 }}</ref> Democratic Representative Johnson of Ohio supported the income tax as the lesser of two evils:
"he was for an income tax as against a tariff tax; but he believed, that it was un-Democratic, inquisitorial, and wrong in principle."<ref>{{cite news |title=Mr. Cockran's Final Effort |url=https://timesmachine.nytimes.com/timesmachine/1894/01/31/104107025.pdf |work=New York Times |date=1894-01-31 }}</ref>

==Legacy==
The income tax provision was struck down in 1895 by the [[Supreme Court of the United States|U.S. Supreme Court]] case ''[[Pollock v. Farmers' Loan & Trust Co.]]'', {{ussc|157|429|1895}}.  In 1913, the [[Sixteenth Amendment to the United States Constitution|16th Amendment]] permitted a federal income tax.

The tariff provisions of Wilson-Gorman were superseded by the [[Dingley Act|Dingley Tariff]] of 1897.

==References==
{{Reflist}}

==Further reading==
*{{cite journal |year=1895 |title=The Income Tax of 1894 |journal=Quarterly Journal of Economics |volume=9 |issue=2 |pages=223–234 |doi=10.2307/1885603 |jstor= 1885603}}
*{{cite journal |last=Dunbar |first=Charles F. |year=1894 |title=The New Income Tax |journal=Quarterly Journal of Economics |volume=9 |issue=1 |pages=26–46 |doi=10.2307/1883633 |jstor=1883633 }}
*{{cite book |title=Arthur Pue Gorman |last=Lambert |first=John R. |year=1953 |publisher=Louisiana State University Press |location=Baton Rouge }}
*{{cite book |title=History of the United States from the Compromise of 1850 to the McKinley-Bryan Campaign of 1896 |last=Rhodes |first=James Ford |year=1967 |publisher=Kennikat Press |location=Port Washington, NY |pages=418–424 }}
*{{cite book |title=William L. Wilson and Tariff Reform: A Biography |last=Summers |first=Festus P. |year=1953 |publisher=Rutgers University Press |location=New Brunswick }}
*{{cite journal |last=Taussig |first=F. W. |year=1894 |title=The Tariff Act of 1894 |journal=Political Science Quarterly |volume=9 |issue=4 |pages=585–609 |doi=10.2307/2139850 |jstor=2139850 }}
* Taussig, Frank. ''Tariff History of the United States'' (1910) [https://www.mises.org/etexts/taussig.pdf online]
*{{cite journal |last=Williams |first=John Alexander |year=1973 |title=The Bituminous Coal Lobby and the Wilson-Gorman Tariff of 1894 |journal=Maryland Historical Magazine |volume=68 |issue=3 |pages=273–287 |issn=0025-4258 }}

==External links==
*[http://www.harpweek.com/09Cartoon/BrowseByDateCartoon.asp?Month=September&Date=8 ''Harper's Weekly'']

{{US tax acts}}
{{Grover Cleveland}}

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[[Category:1894 in American law]]
[[Category:1894 in economic history]]
[[Category:Tariff laws in the United States]]
[[Category:August 1894]]
[[Category:Presidencies of Grover Cleveland]]